With vehicle sales declining in Australia, it seems many of us are choosing to use ride sharing services instead of paying for a vehicle in the garage. Another alternative is car subscription service Carly where you can change your vehicle, just like you change library books (or used to).
Carly has announced that it has raised $1 million through a placement to a strategic investor, Turners Automotive GroupLimited. The service has only been operating since March in Australia, so the investment is impressive for such a young product.
Turners is a New Zealand based integrated automotive financial service group, primarily operating in the automotive sector, and provides strength in the three key areas of automotive retail, finance and insurance, and debt management systems.
The strategic investment from Turners, a major player in the New Zealand automotive market, comes after Collaborate’s March 2019 launch of Carly.
The extra money will be deployed to accelerate the growth of Carly in the car subscription market in Australia. In addition, the parties are also negotiating the launch of a joint vehicle subscription service in New Zealand.
A launch in New Zealand would enable Collaborate to leverage its existing investment in the technology platform supporting Carly and access a substantial new market with the support of Turners, the largest seller of cars in New Zealand.
Collaborate, the company that runs Carly, has issued 100 million fully paid ordinary shares in Collaborate to Turners, at an issue price of $0.01 per Share, representing a 12.13% interest in Collaborate. Subject to shareholder approval at the upcoming 2019 annual general meeting, Collaborate proposes to issue approximately 66.67 million free attaching options to Turners. Turners also has the right to nominate one person to the Board of Directors of Collaborate.
“We are excited about Turner’s future as we position ourselves for the long-term projected changes in the traditional retail car market. New concepts such as peer to peer car rentals and car sharing are a part of the future and provide a new revenue opportunity for car dealers and other industry players.Turners chairman, Grant Baker
“Strategically the investment in Collaborate makes sense for both companies. We have been impressed with Collaborate’s board and management team, the progress they have made and the traction they are getting with customers in a short space of time. We are very excited about the partnership between the two organisations.”Turners CEO Todd Hunter
“We are delighted to be working with Turners, New Zealand’s largest seller of cars and a well trusted brand, to accelerate the growth of vehicle subscription in Australia and New Zealand. We are leaders in our respective market sectors and have much to contribute to each other’s success.”Chris Noone, CEO of Collaborate
Collaborate also proposes to undertake a non-renounceable pro rata entitlement issue to raise approximately a further $2 million. Up to approximately 200 million new shares will be offered at an issue price of $0.01 each on the basis of 1 new share for every 4 existing shares held on the record date.
All shares issued will have free attaching options on a two for three basis. The options have an exercise price of $0.015 per option and will expire on 18 December 2020. Subject to a formal underwriting agreement being executed, it is proposed that the Entitlement Issue will be partially underwritten to $1 million by Hishenk Pty Ltd (Hishenk), Collaborate’s largest shareholder.
The funds raised under the placement and entitlement issue will be used to fund continued growth of the Carly vehicle subscription business and the DriveMyCar car rental business through continued marketing initiatives and pursuit of business development opportunities to grow the available fleet size to meet the demand for vehicles.